Chief executives in the Middle East are the world’s most upbeat about economic growth next year on hopes that the region will see a period of increased stability following the geo-political turmoil of recent years, says consultancy firm PwC.
Of those regional CEOs who say their companies will grow revenues in the next 12 months, 66% are “very confident” compared to the global average of 39%.
The level of confidence, PwC says, can be attributed to “a growing sense among CEOs that having weathered a few years of political and economic uncertainty driven by the Arab Spring, the immediate future looks more stable.”
Other factors boosting the Mideast executives’ confidence include the global demand for energy –welcome news for the oil-and gas-exporters -and the huge infrastructure needs of the region which are expected to provide further economic stimulus.
The positive mood is more apparent among CEOs in the Gulf region, home to the biggest oil producers, than in the Levant.
The confidence levels in part reflect the International Monetary Fund’s outlook earlier this month when it said growth had been “tepid” in 2013 but that the region’s economies were strengthening in line with the global situation, with oil-exporters at an advantage to benefit from the recovery.
At the same time, 70% of Middle Eastern business leaders have identified bribery and corruption, as well as the lack of adequate labor skills as the main threats their businesses face.
“Rightly or wrongly, it must be said the Middle East does have a reputation for corruption,” Badr Jafr, managing director of U.A.E.-based Crescent Group, said at a business event in Dubai on Monday.
“Perceptions of corruption in itself have a major risk premium for doing business and that risk premium translates into an effective tax,” he said.
PwC earlier this year in its crime survey said fewer Mideast businesses had reported economic fraud compared to their global counterparts, but suggested the disparity was mainly due to the lack of reporting and detection systems in the region.
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(via WSJ Blogs)